The "China Carbon Market Conference 2023" was held in Shanghai on 8th November. Mette Quinn, the Deputy Director of the European Commission's Directorate-General for Climate Action, was invited to the conference and introduced the EU’s experience in carbon market and the cooperation between China and the EU in the carbon market in the keynote speech session. During the conference, Mette Quinn was interviewed by a number of Chinese media outlets. The Project Team of “EU-China ETS Policy Dialogue and Cooperation Project” provided support over the whole agenda of Mette Quinn’s participation.
In her keynote speech, Mette Quinn, Deputy Director General of the European Commission's Directorate-General for Climate Action, said that China undoubtedly has the largest emissions trading system in the world, in terms of emissions covered. China has 4.2 billion tonnes of carbon emissions in the power sector, and new sectors will soon be introduced, which will significantly increase the coverage of China's Emissions Trading System (ETS).
Mette Quinn points out that international organisations such as the International Energy Agency or the World Bank see China's ETS as having great potential to reduce emissions. " EU-China cooperation on emissions trading is appropriate and useful, and we can also learn from each other, benefit from our respective experiences, and promote cost-effective emission reduction systems."
Mette Quinn presented the EU's experience with the carbon market over the past 18 years, stating that emissions were reduced by 37.5% in 2022 through it, while GDP grew by 28.3%.
"Right now we have a relatively stable carbon price, which is about 620 CNY. In 2022, more than 1.7 trillion euros or 13 trillion CNY were traded on our market. Companies have optimised their portfolio of carbon emissions and reduced their costs of compliance." She said.
Mette Quinn also said that in 2018, the EU introduced the so-called 'market stability reserve’ mechanism. This enables the supply and demand of allowances to be balanced and to cope with surpluses in the European market.
She also spoke about the revenues from the ETS, which is totally €152 billion since the start of 2013 and almost €32 billion last year. "Most of the revenues go directly to member states, who must now use it fully for climate energy and social purposes. Some of the revenues go into Europe's innovation fund to promote innovative technologies to boost the industry covered by the ETS." She said.
In conclusion, Mette Quinn emphasised that the EU's ETS is proving to be a very effective and useful tool to reduce emissions in the most cost-efficient way, and that the carbon market gives flexibility to the industry, which can pick the appropriate compliance strategy, and also provides the necessary investment signals for the carbon price. It is also important that the market needs to know the medium and long-term plans to make strategic adjustments in investment and compliance.